Tiens Biotech Group (USA) Reports Second Quarter and Six-Month Results

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Tiens Biotech Group (USA) Reports Second Quarter and Six-Month Results

NEW YORK, Aug. 19 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc.
(the "Company" or "Tiens", NYSE AMEX: TBV), http://www.tiens-bio.com , today
announced financial results for the second quarter and six months ended June
30, 2010.

Revenue for the second quarter of 2010 was $8.2 million, compared to $20.6
million for the second quarter of 2009. Revenue for the six months ended June
30, 2010 was $19.6 million, compared to $38.8 million for the first six months
of 2009.

Net income for the second quarter of 2010 was $0.5 million, or $0.01 per
share, compared to net income of $10.3 million, or $0.14 per share, for the
2009 second quarter. For the six months ended June 30, 2010, net income was
$4.1 million, or $0.5 per share, compared to $19.3 million, or $0.26 per share
for the first six months of 2009.

The decrease in revenue was mainly due to a decrease in international
sales which reflects China's Administration of Quality Supervision, Inspection
and Quarantine carrying out a national campaign against unsafe food and
substandard products in 2008, which brought on a general slow-down and backlog
of export clearances for Chinese food products. Upon the lifting of the
regulations, overseas affiliated companies began to purchase more products,
thereby increasing sales in the first two quarters of 2009. Second quarter
2010 sales to Indonesia, Russia, Vietnam and Peru further decreased due to the
distributors in these countries purchasing more products in the first half of
2009, after the 2008 product scarcity. The decrease in sales in China was
mainly due to domestic distributors' reduced purchasing demand following their
stocking up of products during 2009. Management believes the decrease in
revenues is temporary, and that revenue growth will resume in the near future.

Other Highlights

Cost of sales for the second quarter of 2010 decreased to $3.0 million, or
50.3%, compared to $6.1 million for the same period in 2009. For the six
months ended June 30, 2010, cost of sales was $6.5 million, a decrease of
45.3% compared to $11.9 million for the same period in 2009. Cost of sales for
the period decreased at a slightly lower rate than revenue, primarily due to
fixed costs, which do not increase or decrease in line with revenue changes.

Gross profit for the second quarter of 2010 was $5.1 million, a decrease
of 64.5% compared to $14.4 million for the same period in 2009. The gross
profit margin for the second quarter of 2010 was 62.8%, compared to 70.2% for
the same period in 2009. For the six months ended June 30, 2010, gross profit
was $13.1 million, a decrease of 51.4% compared to the same period in 2010,
and the gross profit margin was 66.9% compared to 69.4% for the same period in
2009. These decreases were mainly due to the decrease of revenue overall and
fixed costs, which do not increase or decrease in line with revenue changes.

Selling, general and administrative expenses were $4.1 million for the
second quarter of 2010, an increase of 1.4% compared to $4.0 million for the
same period in 2009. This increase was primarily due to the increase in
research and development expenses. Selling, general and administrative
expenses as a percentage of sales were 49.8% for the second quarter of 2010
compared to 19.5% for the same period in 2009. For the six months ended June
30, 2010, selling, general and administrative expenses were $7.6 million, an
increase of 5.9% compared to $7.1 million in the same period in 2009. This
increase was mainly due to the increase in research and development expense.
For the six months ended June 30, 2010, selling, general and administrative
expenses as a percentage of sales was 38.7%, compared to 18.4% for the same
period in 2009.

As of June 30, 2010, Tiens had $126.8 million of retained earnings and
total shareholders' equity of $180.4 million.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We believe that
our international and domestic sales will return to and possibly exceed
previous levels as our domestic and overseas affiliated companies have
indicated that they are not seeing sizable declines of their revenue, and that
they expect that the market fluctuation will be temporary. They believe that
revenue growth will resume in the near future, consistent with what they have
achieved during the majority of the past 15 years. We remain committed to
building greater market share in China, expanding our international customer
base, and remaining focused on our efforts to generate long-term domestic and
international growth."

Tiens derives its revenues principally from product sales to affiliated
companies in China and internationally in 54 countries. Since its
establishment, Tiens has developed and produced 37 nutrition supplements,
which include wellness products and dietary supplements. Tiens develops its
products at its own product research and development center, which employs
highly qualified professionals in the fields of pharmacology, biology,
chemistry and fine chemistry. Tiens has obtained all required certificates and
approvals from government regulatory agencies to manufacture and sell its
products in China.

In China, Tiens conducts the marketing and sales of its products through
its affiliated company, Tianshi Engineering. Tianshi Engineering markets and
sells Tiens' products in China through chain stores, domestic affiliated
companies, and its 92 branches. Outside of China, Tiens sells its products to
affiliated companies in 54 countries who in turn sell through an extensive
direct sales force, or multi-level marketing sales force. The Company's direct
sales marketing program is subject to governmental regulation in each of these
countries.

Certain statements in this press release constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities and Exchange Act of 1934. Such
forward-looking statements are not necessarily indicative of future financial
results, and may involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements of
the Company, to be materially different from any future results, performance,
or achievements expressed or implied by such forward-looking statements. The
Company's future operating results are dependent upon many factors, including
but not limited to: (i) the Company's ability to obtain sufficient capital or
a strategic business arrangement to fund its expansion plans; (ii) the
Company's ability to build the management and human resources and
infrastructure necessary to support the growth of its business; (iii)
competitive factors and developments beyond the Company's control; whether
Tianshi Engineering, the Company's affiliate which sells its products in China,
obtains a direct selling license in China; and (v) other risk factors
discussed in the Company's periodic filings with the Securities and Exchange
Commission which are available for review at http://www.sec.gov under "Search
for Company Filings."